London’s booming housing market is set to grind to a halt next year, bringing an abrupt end to almost a decade of the capital outperforming the rest of the UK, property company Savills has forecast.
In a vital election year, lending restrictions will start to hit demand for London homes, while at the top end of the market uncertainty over a mansion tax is likely to deter buyers and push prices down. But the property specialists say the pause will be only temporary – and that growth will restart in 2016.
While the UK market as a whole will see a 2% rise in house prices in 2015 and all regions outside London will see rises of between 1% in the north-east up to 3.5% in Scotland, the surges seen in the capital earlier this year mean that further potential for growth is currently limited, the company said. Thus London property prices will be static in 2015, but the researchers predicted the market will then pick up again so that by the end of 2019 prices will be 10.4% higher than now.
In the market for prime London homes – in the swankiest central districts like Knightsbridge and Mayfair – prices are set to drop by 0.5% in 2015 as buyers sit tight to see if a tax is introduced on properties costing more than £2m. But Savills said they are also likely to bounce back and rise by nearly 23% by the end of 2019.
via The Guardian